Fundamentals

APOLLO HOSPITALS

Ticker: 508869 BUY: Rs.1191.15
Target: Rs.1320

The company mainly operates through two segments, i.e. healthcare services and pharmacy, which contribute 55 per cent and 40 per cent , respectively, towards its total revenue. Over the last five years, the healthcare segment grew by 13 per cent CAGR and the pharmacy segment by 24 per cent CAGR. It has added new hospitals in Tamil Nadu, Andhra Pradesh and Telangana, which would drive its revenue in the near term. Also, its number of pharmacy stores have touched 3085, of which 64 stores were added in Q1FY19. The rising revenue from the existing stores have added to the growth of this segment. The management has assured completion of capex and it is optimistic about improvement in margins. In Q1FY19, the company delivered robust growth in topline and profits on QoQ and YoY basis. Considering these factors, we recommend it as a BUY.



PETRONET LNG

Ticker: 532522 BUY: Rs.241.70
Target: Rs.260

Petronet LNG is a government company engaged in importing LNG having two terminals in Dahej and Kochi. The installed capacity of both these facilities is 15 MMTPA and 5 MMTPA, respectively. In Q1FY19, the increased capacity utilisation at Dahej facility led to 15 per cent YoY growth in volumes and 42 per cent YoY growth in revenue. The company intends to expand this capacity to 17.5 MMTPA by H1FY20, which would further drive the topline . The volumes at Kochi terminal are set to increase as demand of pipeline connectivity from Tamil Nadu and Karnataka is rising. The operating profit and net profit were up by 25.6 per cent and 34 per cent YoY during the quarter. It is also planning to set up 20 LNG stations in India. Considering the robust growth and capacity expansion, we recommend it as a BUY.